Industry Registration and Classification at the Department of Industry

What registration does

The Department of Industry does not license industries. It registers them, and in doing so places each one in two classes at once. Which government registers you, which incentives you can claim, how much you are fined if you get it wrong, how often you must report: all of it flows from those two classifications rather than from the registration itself.

The Industrial Enterprises Act 2076 (2020) was authenticated on 2076.10.28 (11 February 2020) and was one of six statutes amended by the omnibus act of 31 March 2025. Section 3 sets the baseline: no person shall establish or operate an industry without registering it under the Act.

“Industry” is broader than the English word suggests. The Act’s scheduled categories run to energy, manufacturing, agriculture and forest products, mining, infrastructure, tourism, information and communication technology, and services. A software firm and a hotel are industries in the same sense that a cement plant is.

Class by size

The second classification is on fixed capital, and it is the one that does the practical work.

Class	Fixed capital	Additional tests
Micro	Up to NPR 2 million, excluding house and land	Entrepreneur personally involved; up to 9 workers; annual transactions under NPR 10 million; energy capacity up to 20 kW
Cottage	Not defined by capital	Based on traditional skills; energy capacity up to 50 kW
Small	Up to NPR 150 million	—
Medium	Above NPR 150 million to NPR 500 million	—
Large	Above NPR 500 million	—

Two features of this table are easy to miss. Micro is more than the bottom of the capital ladder. It is a status with four cumulative conditions, and an enterprise that hires a tenth worker or crosses NPR 10 million of annual transactions falls out of it whatever its balance sheet says. Cottage industry is defined by craft and energy use rather than by money at all, which is why a cottage industry can be capitalised above the micro threshold and still not be a small industry.

Fixed capital excludes house and land for the micro class specifically. That exclusion is not stated for the other classes in the same terms, and anyone sitting near a boundary should have the classification confirmed by the registering body rather than assumed from a balance sheet.

Who registers you

The Act splits registering authority between the federation and the provinces. The Department of Industry registers:

• industries listed in Schedule 1, which require permission before registration;
• industries with foreign investment;
• industries falling under the federal list in Schedule 5 of the Constitution;
• industries operating in more than one province;
• academic consultancy services relating to diplomatic affairs.

Everything else is registered and administered by the province in which it operates. For a domestic small manufacturer, the Department of Industry is not the counter at all. Secondary guidance written for foreign investors rarely says so.

Where a project is large enough to fall under Investment Board Nepal, the Board’s own statute governs and the approving body changes again.

Schedule 1 permissions

Nine categories cannot be registered at all until permission has been granted:

1. Arms, ammunition, gunpowder and explosives
2. Security printing, banknotes and coins
3. Tobacco products and electronic cigarettes
4. Microbrewery, beer and alcohol production
5. Excavation of stone, ballast and sand
6. Radio communication equipment
7. Excavation of precious minerals and petroleum
8. Liquefied petroleum gas refilling
9. Drone manufacture and drone services

The decision is made within thirty days, and the permit is valid for a stated registration period. If the industry is not registered within it, the permit is void and the process starts again. The list mixes national security, revenue protection and environmental control. Two entries, drones and electronic cigarettes, are recent additions covering activities that did not exist when the previous industrial statute was written.

The statutory timetable

The Act is unusually specific about time limits, and they run in both directions.

• Deficient application: the applicant has 90 days to supply the missing details or documents.
• Registration: the registering body must issue the certificate within five days of receiving complete details or documents.
• Refusal: an appeal lies to the Ministry within 30 days, and the Ministry must decide within 30 days of the complaint.
• Commencement: the industry must begin operating within the period stated on the certificate and tell the registering body within 30 days of doing so. An extension must be sought 30 days before expiry, with reasons.
• Annual reporting: prescribed details within six months of the end of each fiscal year, with a nil return permitted where a closure has been formally recorded.

The five-day registration limit is the striking one, and it repays a precise reading. It runs from receipt of complete details, rather than from the first submission. The elapsed time an applicant experiences is governed by the completeness cycle, not by the statutory limit.

What non-registration costs

Section 43(1) scales the fine to the class: NPR 5,000 for a micro-industry, NPR 25,000 for a cottage or small industry, NPR 50,000 for a medium industry, NPR 100,000 for a large industry. The registering body may also order immediate closure.

For a large industry, NPR 100,000 deters nothing. It is a fraction of a week’s operating cost. The deterrent is the closure power, and the collateral consequences behind it. An unregistered industry cannot produce the registration certificate that customs, banks, sectoral regulators and public procurement bodies routinely ask for.

Cost of registering

The Department publishes fee ranges on its industry registration page. For a proprietorship, registration runs from NPR 1,000 where fixed capital is up to NPR 100,000 to NPR 50,000 above NPR 50 million, with renewal from NPR 600 to NPR 15,000 across the same brackets. These figures are for firm registration at the Department and should not be read across to an industry held through a company.

For a foreign-invested industry the Department’s published checklist expects, after incorporation, a copy of the foreign investment approval letter issued by its Foreign Investment Section, certified copies of the certificate of incorporation and the memorandum and articles, and the environmental impact assessment or initial environmental examination report. That last item determines the real timetable for a physical plant, and it lies outside the Department’s control.

The Board and the One Stop Centre

The Act establishes the Industry and Investment Promotion Board: sixteen members chaired by the Minister for Industry, including the Governor of Nepal Rastra Bank, a National Planning Commission representative, five secretaries, the heads of the chamber federations and appointed experts, meeting at least once every two months. It grants Schedule 1 permissions and sets the direction of industrial policy administration.

The Act also establishes the One Stop Service Centre, to deliver the services an industry needs from one place. It brings counters together. It does not remove the underlying requirement to hold a sectoral licence, an environmental clearance and a local registration, none of which the Department of Industry issues.

What the classification is worth

The boxes carry money, which is why the boundary matters. The Act’s facilities chapter and the annual Finance Act attach exemptions, rebates and priority treatment to particular size and nature classes: energy, agro-processing, information technology, and the micro and cottage categories especially. Those figures change every year with the budget. A boundary case is worth arguing at registration rather than after the first tax assessment.

Sources

1. The Industrial Enterprises Act, 2076 (2020) — English translation

   Government of Nepal · Authenticated 2076.10.28 (11 February 2020); in force, as amended · Tier 1 — Primary legal instrument

   Supports: Date of authentication; classification by nature and by fixed capital; the micro-industry criteria; the division of registering authority; the section 4, 5, 6, 9 and 13 timetables; Schedule 1; section 43 penalties; the Industry and Investment Promotion Board; and the One Stop Service Centre.

   Accessed 26 August 2026

2. औद्योगिक व्यवसाय ऐन, २०७६ (Industrial Enterprises Act 2076) — departmental copy

   Department of Industry · In force, as amended · Tier 1 — Primary legal instrument

   Supports: The Department of Industry's own published copy of the Act.

   Accessed 26 August 2026

3. उद्योग दर्ता सम्बन्धी जानकारी (Information on industry registration)

   Department of Industry · Current as at 26 August 2026 · Tier 2 — Official publication

   Supports: The 35-day registration window following foreign investment approval, the documents expected after incorporation including the environmental assessment report, and the proprietorship registration and renewal fee ranges.

   Accessed 26 August 2026

4. Publication of Act to Amend Some Nepal Acts Relating to Improving Economic and Business Environment and Enhancing Investment 2081 (2025 A.D.)

   Pradhan, Ghimire & Associates · 2025 · Tier 6 — Professional or news source

   Supports: That the Industrial Enterprises Act 2076 was one of six statutes amended by the omnibus act authenticated on 31 March 2025.

   Accessed 26 August 2026